"We have proposed to the Finance Ministry about creating a SWF of USD 1 billion for acquiring of fertiliser mineral assets in foreign countries," a source in Fertiliser Ministry said.

The broad modalities about the nature of operation of the fund still needs to be discussed, the source added.

India imports about 6 million tonne each of potash and urea and 7 million tonnes of Di-ammonium Phosphate (DAP) every year.

According to another source in the ministry, the nature of operation of the fund needs to be discussed in detail as there are some grey areas.

"We need to sort out whether it will be used for resource gap funding in case a private company is looking to acquire assets in a foreign country or to help public sector firms in acquiring assets," he said.

Various committees and working groups have suggested the public private partnership (PPP) model for acquisition of assets, in which case the modalities of the fund will have to be cleared about the level of financial support for both public and private sector, the source added.

Recently, the Working Group on fertilisers, set up by the Planning Commission for the 12th Five Year Plan (2012-17), had suggested that India should look at buying fertiliser mineral assets in over 20 countries including Belarus and Canada to meet the domestic shortfall.

It had also recommended that in view of the risk and huge costs involved in acquisitions, the government should create a fund with an initial corpus of USD 5 billion.

Likewise, the Working Group on Mineral exploration and development (other than coal and lignite) for the 12th Plan in its report had emphasised on public-private partnership for the acquisition of fertiliser assets abroad.

The Planning Commission had also suggested setting up of a SWF with an initial corpus of USD 10 billion, mainly to invest in energy and mining assets abroad.

Industry body Fertiliser Association of India has also asked the government to create a SWF of USD 20 billion to acquire mineral assets abroad.